Microsoft Texas DC Project Now $1 Billion

In June we noted that Microsoft is considering sites in Texas for a major data center, with San Antonio and Austin in the running. At the time the reported price tag for the project was $600 million. Local media reports have updated the story this weekend, with Microsoft confirming it is "looking at San Antonio for a potential future operations facility. We are still working on our plans in San Antonio so we do not have detailed information to share at this time."

Of greater interest: the price tag on the project has now risen to $980 million, up nearly $400 million from the original estimates from June. The size of the project - 470,000 square feet - hasn't changed, either. What's up with the cost estimate? One possibility is that the original cost estimate of $600 million was incomplete. Another possibility is that the cost is rising along with projected power and cooling costs. At least one other company developing new data centers has experienced this.

In June Equinix said that it would invest $165 million in the first phase of a new Chicago area data center. In September, just three months later, Equinix announced that it was upgrading its plan to provide "over twice the power and cooling specifications of its original design."

As we noted at the time, that suggests Equinix is seeing its clients' heat and power loads continue to rise - or at least that those clients are seeking enhanced specs on the new sites to have headroom on a "just in case" basis. Microsoft is different, as we gather the Texas data center will be for its own use in the platform for its Live family of SaaS services.

Whatever the details, local officials are optimistic. "It appears everything is moving right," Bexar County Judge Nelson Wolff told the San Antonio Express-news. "We hope to have something to announce after the first of the year."